Citation NR: 9718253
Decision Date: 05/23/97 Archive Date: 06/03/97
DOCKET NO. 97-08 641 ) DATE
)
)
THE ISSUE
Eligibility for payment of attorney fees from past due
benefits.
ATTORNEY FOR THE BOARD
S. L. Smith, Counse
INTRODUCTION
The veteran served on active duty from December 1942 to
January 1946, and died in November 1993. This matter comes
before the Board of Veterans’ Appeals (Board) on its own
motion to review the reasonableness of an attorney fee
agreement between the veteran’s widow and the attorney.
By a letter dated in August 1996, the Board had requested
from the attorney a copy of any fee agreement that may have
been executed with respect to representation before VA. See
38 C.F.R. § 20.609 (g) (1996) (a copy of any fee agreement is
to be filed with the Board within 30 days of execution).
Following receipt of a copy of a September 9, 1996, agreement
between the veteran’s widow and the attorney, the Board moved
to review the reasonableness of the agreement. See
38 U.S.C.A. § 5904(c)(2) (the Board may review the
reasonableness of a fee agreement on its own motion). The
attorney was notified in writing by the Office of the
Chairman of the Board in March 1997, with a copy sent to the
veteran’s widow, that the Board intended to review the
reasonableness of the fee agreement. A 30-day period in
which to submit argument or evidence regarding the
reasonableness of the fee agreement was provided. In April
1997, a response was received from the attorney
CONTENTIONS
The attorney contends that he is eligible for payment of
attorney’s fees for the work he has performed subsequent to
the favorable Board decision in August 1996. Specifically,
it is alleged that payment is warranted for providing the
claimant an explanation of the Board’s August 1996 decision
and her appellate rights with regard thereto. He has further
suggested that a fee of $150.00 might be a reasonable fee for
these services.
DECISION OF THE BOARD
The Board, in accordance with the provisions of 38 U.S.C.A.
§ 7104 (West 1991 & Supp. 1995), has reviewed and considered
all of the evidence and material of record in the veteran’s
claims files. Based on its review of the relevant evidence
in this matter, and for the following reasons and bases, it
is the decision of the Board that the evidence warrants a
finding of eligibility for payment of attorney fees from
past-due benefits; however, the preponderance of the evidence
is against a finding of reasonableness for payment of the 25
percent contingency fee for services, as set forth in the
September 9, 1996 attorney fee agreement. However, it is the
further decision of the Board that the evidence warrants a
finding that $150.00 is a reasonable fee for representation
before the Department of Veterans Affairs (VA) after the
Board decision of August 30, 1996
FINDINGS OF FACT
1. The veteran died in November 1993. His widow filed a
claim for accrued benefits based on an increased evaluation
for his service-connected post-traumatic stress disorder
(PTSD) in January 1994.
2. By a July 1994 RO rating decision, an increased
evaluation beyond the previously assigned 30 percent rating
for PTSD, for the purposes of accrued benefits, was denied
and a timely appeal was filed thereafter.
3. The only Board decision on this issue was issued on
August 30, 1996, and held that the evidence of record at the
time of the veteran’s death warranted an increased evaluation
of, but not more than, 70 percent for his service-connected
PTSD for purposes of accrued benefits.
4. A rating action in September 1996 effectuated the Board’s
grant of the 70 percent rating for the service-connected PTSD
for purposes of accrued benefits, and resulted in payment of
$7110.00 to the claimant for past due benefits.
5. In a written fee agreement, dated September 9, 1996, the
claimant retained the attorney, to provide legal services on
a contingency basis of 25 percent of past-due benefits
recovered. The fee agreement did not set forth that fees be
paid by VA directly to the attorney.
6. Legal services involving the claimant’s VA claim were
rendered by the attorney subsequent to his being retained by
the claimant.
7. The legal services performed since the August 30, 1996
Board decision (explaining to the claimant the Board’s August
1996 decision and appellate rights) do not warrant more than
$150.00 in attorney fees.
8. The 25 percent contingency fee specified in the September
1996 fee agreement would be unreasonable for the nature and
extent of legal services performed by the attorney since the
August 30, 1996, final decision of the Board.
CONCLUSIONS OF LAW
1. The criteria for a valid fee agreement between the
attorney and the claimant as to VA representation in
connection with a claim for accrued benefits based on an
increased rating for PTSD, have been met. 38 U.S.C.A.
§ 5904(c)(1) (West 1991 & Supp. 1996); 38 C.F.R. § 20.609(c)
(1996).
2. The fee specified in the agreement as being payable to
the attorney in the amount of 25 percent of past-due benefits
awarded to the claimant is not reasonable. 38 U.S.C.A.
§ 5904(d) (West 1991 & Supp. 1996); 38 C.F.R. § 20.609 (e),
(f) (1996).
3. The sum of $150.00 is a reasonable fee for representation
services performed by the attorney since the August 30, 1996,
Board decision. 38 U.S.C.A. § 5904(d) (West 1991 & Supp.
1996); 38 C.F.R. § 20.609 (e), (f) (1996).
REASONS AND BASES FOR FINDINGS AND CONCLUSIONS
I. Factual Background
In October 1993, the veteran appointed J. S. as his attorney
in connection with claims for VA benefits. The veteran died
in November 1993. In July 1994, a Notice of Disagreement
(NOD) was received as to a rating action in July 1994 denying
an evaluation in excess of 30 percent for PTSD for purposes
of accrued benefits. A Board decision of August 1996 granted
an evaluation of 70 percent for the service-connected PTSD
for purposes of accrued benefits. A rating action in
September 1996 effectuated the Board’s decision, and resulted
in past due benefits in the amount of $7,110.00 being paid
directly to the claimant.
In September 1996, a copy of a fee agreement executed in
September 1996 between the veteran’s widow and the attorney
was received at the Board. The agreement stated that legal
services were to be provided “at any time after the first
denial decision by the Board” before the VA and United States
Court of Veterans Appeals (Court) and that the “[c]lient
agrees to pay a fee of 25% Retroactive [sic] Benefits in
connection with his/her claim” with VA and that the fee was
contingent upon a favorable outcome
In a January 1997, letter the attorney advised VA that he had
not charged the veteran’s widow a fee for legal services
rendered prior to the August 1996 Board decision.
In May 1997, a letter was received from the attorney to the
effect that he had not and would not charge a fee until after
the August 1996 Board decision. However, he was
contemplating charging a fee for services performed after the
Board decision. It was his position that his services were
not wholly completed on that date because:
(a). [He] had to explain the decision to
her and her appellate options;
(b). Further funds are still due to [the
widow].
He further stated that he “would aver that a fee of $150
would be appropriate for post decision work for the time
spent.”
II. Law and Analysis
This case is before the Board for a ruling on a motion for
review of the fee agreement for reasonableness under
38 U.S.C.A. § 5904(c)(2). This requires the Board to reach
determinations in two basic areas: (1) whether the fee
agreement meets the basic requirements of 38 U.S.C.A.
§ 5904(c)(1) (West 1991 & Supp. 1996) and (2) whether the fee
charged in this particular case is reasonable
a. Eligibility for attorney fees
Historically, fees which could be lawfully charged by
attorneys at law and accredited agents for services and
proceedings before VA were limited to $10 since the 1860’s.
See Walters v. National Ass’n of Radiation Survivors, 473
U.S. 305 (1985). The Veterans Judicial Review Act (VJRA),
Pub.L. 100-687, 102 Stat. 405 (1988), now allows VA claimants
and appellants to enter into agreements with attorneys and
agents for the payment of fees for services in representing
them in proceedings before VA, as long as the fees are
neither “unreasonable” nor “excessive.” A fee may be charged
of the claimant or appellant if the following conditions are
met:
(1) A final decision must have been
promulgated by the Board with respect to
the issue, or issues, involved. Fees may
neither be charged, allowed, nor paid for
services provided before the date on
which the Board first makes a final
decision on the case. 38 U.S.C.A.
§ 5904(c)(1) (West 1991 & Supp. 1996);
38 C.F.R. § 20.609(c)(1) (1996).
(2) The Notice of Disagreement which
preceded the Board decision with respect
to the issue, or issues, involved must
have been received by the RO on or after
November 18, 1988. VJRA § 403, 102 Stat.
4122; 38 C.F.R. § 20.609 (1996)
(3) The attorney-at-law or agent must
have been retained not later than one
year following the date that the decision
by the Board with respect to the issue,
or issues, involved was promulgated.
38 U.S.C.A. § 5904(c)(1) (West 1991 &
Supp. 1995); 38 C.F.R. § 20.609(c)(3)
(1996).
In a precedent opinion, the VA’s Office of General Counsel
cited an analysis of the legislative history of the VJRA
contained in the Court’s decision in In the Matter of Smith,
1 Vet.App. 492, 508-09 (1991) (Steinberg, J., concurring),
which highlighted the fact that Congress only envisioned paid
attorney representation after the Board first enters a final
decision on a claim. The General Counsel concluded that an
attorney may not receive or solicit a fee in connection with
representation of a claimant before the Department on a
benefits issue until after the Board first issues a final
decision on that claim. Furthermore, a remand decision is
not a “final” decision of the Board. VA O.G.C. Prec. No. 18-
92, 57 Fed.Reg. 49747 (1992); 38 C.F.R. § 20.1100(b). The
VA, including the Board, is bound by the General Counsel’s
opinion. 38 U.S.C.A. § 7104(c).
A careful review of the claims folder reveals that the only
Board decision on the issue of increased evaluation of
service-connected PTSD, for purposes of accrued benefits, was
the August 1996 decision of the Board that increased the
deceased veteran’s service-connected disability evaluation,
for the purposes of accrued benefits, from 30 to 70 percent.
In reaching that decision, the Board also
specifically found that an evaluation in excess of 70 percent
(i.e., a total or 100 percent rating) was not warranted for
the veteran’s PTSD for purposes of accrued benefits. In
addition, the notice of disagreement preceding this final
decision was received by the RO subsequent to November 18,
1988. Therefore, it meets both the first and second
statutory requirements for a valid fee agreement.
38 U.S.C.A. § 5904(c)(1); 38 C.F.R. § 20.609(c)(1).
The third requirement of 38 U.S.C.A. § 5904(c)(1) that must
be met before an attorney may qualify for attorney’s fees for
representation before the VA is that the attorney must be
retained with respect to such case before the end of the one-
year period beginning on the date of the qualifying final
decision of the Board. In the instant case, the qualifying
final decision of the Board is the only Board decision - that
rendered on August 30, 1996. The attorney was clearly
retained by the claimant within the qualifying time period.
The Board finds that the attorney would be entitled to
attorney’s fees for representation of the claimant on the
issue of increased evaluation of the veteran’s PTSD for
accrued benefits purposes, performed after August 30, 1996.
Thus, the Board concludes that the only qualifying services
provided by the attorney for which he might be paid for
representation before the Department from past due benefits
is the aforementioned “explanation” of the Board’s decision
to the client, as this service was provided after August 30,
1996, and does concern the issue for which the Board issued
the final decision in August 1996.
The Board further notes that the potential for legal
representation by the attorney before VA with regard to the
issue of entitlement to an increased evaluation, in
excess of 70 percent, for the veteran’s service-connected
PTSD, for the purposes of accrued benefits, has been removed.
To date, there has been no definitive evidence that the
claimant has filed an appeal of this issue with the Court;
thus, there has been no favorable resolution of this issue
that was impliedly denied by the Board’s decision of August
1996. Furthermore, the Board notes that it may only review
fee agreements for representation before the VA, including
the Board. 38 U.S.C.A. § 5904(c)(2). Agreements for
representation before the Court are reviewable by the Court.
38 U.S.C.A. § 7263.
Thus, the Board finds that the attorney is not eligible for
payment of representation accorded prior to the date of the
qualifying final decision in this case (August 30,1996). He
is, however, eligible for payment of representation accorded
since August 30, 1996.
The Board concludes that, in light of the above facts and
law, the attorney may charge the claimant a fee for
representational services provided since August 30, 1996, as
to the issue of accrued benefits based on an increased
evaluation for PTSD. The Board further finds, based on the
evidence of record and the cited laws and regulations, that
the only qualifying legal services for which a fee might be
charged in the instant case would be the explanation to the
claimant of the Board’s decision and her appellate rights.
b. Reasonableness of Fee
Fees permitted for services of an attorney admitted to
practice before the Department must be reasonable. Fees
which total no more than 20 percent of any past-due benefits
awarded, will be presumed reasonable. 38 C.F.R. § 20.609
(e),(f)
Factors considered in determining whether fees are reasonable
include: (1) the extent and type of services the
representative performed; (2) the complexity of the case; (3)
the level of skill and competence required of the
representative in giving the services; (4) the amount of time
the representative spent on the case; (5) the results the
representative achieved, including the amount of any benefits
recovered; (6) the level of review to which the claim was
taken and the level of review at which the representative was
retained; (7) rates charged by other representatives for
similar services; (8) whether and to what extent, the payment
of fees is contingent upon the results achieved. 38 C.F.R.
§ 20.609(e).
The Board may review a fee agreement between a claimant and
an attorney upon its own motion and may order a reduction in
the fee called for in the agreement if it finds that the fee
is excessive or unreasonable in light of the standards set
forth above. 38 C.F.R. § 20.609(i).
As explained in the Introduction section of this decision,
this issue is before the Board on the Board’s own motion.
Initially, the Board finds that the fee set forth in the
September 1996 fee agreement is entitled to no presumption of
reasonableness.
The Board finds that the 25 percent contingency fee set forth
in the fee agreement is, in fact, unreasonable in the instant
case. As the Board found (and the attorney admitted) there
can be no fee charged for services performed prior to the
date of the final Board decision on the issue. In the
instant case, the date of the final Board decision was August
30, 1996. Thus, only services performed since that date may
be considered in determining whether the fee set forth in the
fee agreement is, in fact, reasonable. Careful review of all
the evidence of record, as well as the attorney’s recent
letter of April 1997, reveals that the only services
performed on the issue of entitlement to accrued benefits
based on an increased evaluation for PTSD was the explanation
to the claimant of the Board’s final decision and her
appellate rights. Thus, considering the relatively short
amount of the attorney’s time this would require, the Board
concludes that the 25 percent contingency fee set forth in
the September 1996 fee agreement is clearly unreasonable and
should be reduced. The Board further notes that the
attorney, in his April 1997 correspondence to the Board,
suggested that a fee of $150.00 might be appropriate for the
services he had performed since August 30, 1996, on this
case. After careful consideration of the factors set forth
above, the Board agrees, and specifically finds that the
attorney is entitled to a fee of $150.00 for representational
services performed before the Department on behalf of the
claimant with regard to entitlement to accrued benefits based
on an increased evaluation for the veteran’s service-
connected PTSD.
Finally, the Board notes that the attorney has not contended
that his current attempts to reopen the claim before the RO
should be considered in determining the reasonableness of his
fee and the Board, in fact, has not taken such efforts into
consideration in reaching this decision. The Board believes
that this is appropriate, since the Board’s action with
regard to entitlement to accrued benefits is a final
decision, and, as such, must be either appealed to the Court
or addressed again by the Board following a grant of a Motion
to Reconsider
ORDER
Eligibility for payment to the claimant’s attorney, for
services rendered before the VA and the Board totaling
$150.00 of past-due benefits resulting from the grant of
accrued benefits based on an increased evaluation for PTSD,
is established. The appeal is allowed to this extent.
MICHAEL S. SIEGEL
Acting Member, Board of Veterans’ Appeals
The Board of Veterans' Appeals Administrative Procedures
Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, 741
(1994), permits a proceeding instituted before the Board to
be assigned to an individual member of the Board for a
determination. This proceeding has been assigned to an
individual member of the Board.
NOTICE OF APPELLATE RIGHTS. Under 38 U.S.C.A. § 5904(c)(2)
(West 1991), a finding or order of the Board of Veterans'
Appeals upon review of an agent's or attorney's fee agreement
may be reviewed by the United States Court of
(CONTINUED ON NEXT PAGE
Veterans Appeals under 38 U.S.C.A. § 7263(d) (West 1991).
Under 38 U.S.C.A. § 7266 (West 1991 & Supp. 1995), a final
decision of the Board of Veterans' Appeals may be appealed to
the United States Court of Veterans Appeals by a person
adversely affected by the decision within 120 days from the
date of mailing of notice of the decision. The date which
appears on the face of this decision constitutes the date of
mailing and the copy of this decision which you have received
is your notice of the action taken by the Board of Veterans'
Appeals.
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